Memphis Remains a Player in Increasingly-Global Cotton Trade - 2003-10-01

Cotton is grown throughout the American South, but the cotton business has traditionally been dominated by the southern city of Memphis, Tennessee. VOA's Nancy Beardsley has more on how that business is faring in Memphis these days, and how it's dealing with challenges to its future.

Nelson Ayala was born in London, grew up in Paraguay, and now lives in Memphis, Tennessee. He works as a merchant at Cargill Cotton, one of America's oldest cotton companies.

"Memphis, from the Paraguayan cotton point of view, has always been considered the center of the cotton world," said Mr. Ayala. "All the information goes through Memphis and is distributed out of Memphis. It's the best place for me to be, on the professional side, to be working here."

Memphis is a magnet for cotton industry visitors as well. "It doesn't matter if they're coming from Uzbekistan or Brazil or China or wherever - if you're coming to the U.S. to talk about cotton, this is your major destination," said Jerry Marshall, a senior vice president at Cargill Cotton. "There's such a critical mass of businesses here, whether those are trading businesses, machinery companies, the seed breeders, the trade associations, the National Cotton Council, the American Cotton Shippers Association - all of those organizations are here."

The sound of a cotton gin is as much as much a part of Memphis history as the sound of blues music. Jerry Marshall says the city's location on the Mississippi River helped make it an early crossroads for the cotton trade.

"Cotton used to move almost entirely by boat," he explained. "And oceangoing vessels could come up as far as New Orleans or Mobile, and we would move cotton down the river in barges. Front Street is down by the riverfront. At one time the street was entirely full of cotton trade. We've got old photographs of archways that were built over the street out of bales of cotton, that were brought there to be bought and sold."

But while Memphis still remains a global force in the cotton industry, the industry no longer plays such a visible role in the city. The change is especially evident at the Memphis Cotton Exchange, a trade association formed in 1873. It's located in a tall building in downtown Memphis.

"This room was where all the markets were," explains Charlie Chambers of the F.G. Barton Cotton Company, sitting in the large room that's long served as headquarters for the Cotton Exchange. "Everything was posted here. They posted those future prices up there, and we'd have sometimes a hundred people in this room, checking on the market. They'd come in here two or three times a day."

A chalkboard on the wall still records crop prices and other information, and chairs still fill the room. But they're unoccupied much of the time, and the Cotton Exchange has sold off most of the building to other businesses. Mr. Chambers entered the cotton business in 1946. In more recent decades, he's watched companies move to the suburbs or go out of business.

"It's spread out to where they've all left Front Street, almost. It's cut back to where you've only got about three major sales merchants here. They just got where one firm could handle so much more cotton, and other people went out of business and some went broke," said Mr. Chambers.

Jerry Marshall adds that other Memphis-based companies, like Federal Express, have broadened the city's economic base, making it less dependent on cotton. He notes that the Memphis cotton trade still earns a lot of money. "It doesn't employ nearly as many people," said Mr. Marshall. "There's more dollars than there ever were in the past, but they're trading dollars, not local dollars."

Global challenges are also a concern to the Memphis cotton business. "The surge in imports, especially from China, is putting pressure on the American textile industry," says Gary Adams, an economic and policy analyst for the National Cotton Council, which promotes the industry's political and financial interests."

"Back in the late 1990s, we were consuming roughly about 11 million bales of cotton on the domestic industry and now we've fallen below 7 million bales," explained Mr. Adams. "We've seen almost 300,000 jobs lost just in the last couple of years in the textile and apparel industries."

But the American industry works to maintain an competitive position in the global cotton market. "We continue to be active in Washington, looking at ways to enforce some of the trade agreements that are in place that can provide protection for the domestic industry," said Mr. Adams. "And we're looking towards the future for strategies to try to stabilize the industry we have. Some of those involve looking across the broader Western Hemisphere with the North America Free Trade Agreement and some of the things that are being looked at for a potential Central American Trade Agreement."

Gary Adams says cotton growers within the United States are also making new efforts to unite and strengthen their industry. And while Memphis works to secure the future of the cotton business, there's an effort underway to pay tribute to the past. Cargill vice president Jerry Marshall is involved in plans to turn the Memphis Cotton Exchange into a museum. "There are a lot of people who've built museums about ginning, all the way back to [cotton gin inventor] Eli Whitney," he said. "People who have museums about the plant. The National Civil Rights Museum has a lot to do with the history of slaves and their involvement in the cotton business. But nowhere are we are aware that there's a museum about the international trade in cotton."

And Jerry Marshall says it's the international cotton trade that helped shape Memphis and that still helps to define what the city is today.